Correlation Between PLDT and GT Capital
Can any of the company-specific risk be diversified away by investing in both PLDT and GT Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PLDT and GT Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLDT Inc and GT Capital Holdings, you can compare the effects of market volatilities on PLDT and GT Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PLDT with a short position of GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and GT Capital.
Diversification Opportunities for PLDT and GT Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PLDT and GTCAP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings and PLDT is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PLDT Inc are associated (or correlated) with GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of PLDT i.e., PLDT and GT Capital go up and down completely randomly.
Pair Corralation between PLDT and GT Capital
Assuming the 90 days trading horizon PLDT Inc is expected to generate 0.6 times more return on investment than GT Capital. However, PLDT Inc is 1.66 times less risky than GT Capital. It trades about 0.14 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.68 per unit of risk. If you would invest 129,800 in PLDT Inc on November 3, 2024 and sell it today you would earn a total of 4,200 from holding PLDT Inc or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLDT Inc vs. GT Capital Holdings
Performance |
| Timeline |
| PLDT Inc |
| GT Capital Holdings |
PLDT and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and GT Capital
The main advantage of trading using opposite PLDT and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, GT Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GT Capital will offset losses from the drop in GT Capital's long position.| PLDT vs. Philex Mining Corp | PLDT vs. Figaro Coffee Group | PLDT vs. Top Frontier Investment | PLDT vs. Semirara Mining Corp |
| GT Capital vs. Asia United Bank | GT Capital vs. Apex Mining Co | GT Capital vs. Philex Mining Corp | GT Capital vs. Lepanto Consolidated Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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